2014 (11) TMI 747 - HC - Central Excise

Tribunal Exceeded Jurisdiction: Deposit Condition Invalid

MAA MAHAMAYA INDUSTRIES LTD. Versus COMMISSIONER OF CENTRAL EXCISE, CUSTOMS AND SERVICE TAX VISAKHAPATNAM-I, COMMISSIONERATE

The High Court of Andhra Pradesh held that the Tribunal exceeded its jurisdiction by imposing a Rs. 5 crores deposit condition for fresh adjudication by ... Validity of Tribunal's order - appellant, argued that the Tribunal has no jurisdiction to ask the appellant to make the deposit as a pre-condition for fresh adjudication - held that:- Tribunal does not have any inherent power like Civil Court to pass appropriate order for the ends of justice. The Tribunal is a creature of a Statute with specific powers mentioned in the Statute itself. From the grounds of the appeal and the Statute, we do not find any provision for depositing ₹ 5crores for adjudication and the same is without jurisdiction and accordingly the same is deleted - Decided in favour of assessee. Issues:Jurisdiction of the Tribunal to impose a deposit condition for fresh adjudication by the Commissioner of Central Excise.Analysis:The High Court of Andhra Pradesh examined the issue of whether the Tribunal had the jurisdiction to impose a condition of depositing Rs. 5 crores for adjudicating a matter afresh by the Commissioner of Central Excise. The case involved a show cause notice issued by the Commissioner, which resulted against the appellant. An appeal was made to the Tribunal, which decided that the case warranted a fresh hearing by the Commissioner, with the specific direction to provide materials. However, the Tribunal imposed a condition that the appellant must deposit Rs. 5 crores for the fresh adjudication to take place.The appellant's Senior Counsel argued that the Tribunal exceeded its jurisdiction by requiring the deposit as a pre-condition for fresh adjudication. It was contended that the Tribunal, as an appellate authority, lacked the power to demand security before adjudication, unlike a Civil Court. On the other hand, the respondent's counsel argued that the deposit was considered a security measure by the Tribunal to serve the interests of justice.The High Court, led by the Chief Justice, rejected the respondent's argument and agreed with the appellant's Senior Counsel. It was held that the Tribunal, being a statutory body with specific powers outlined in the relevant Statute, did not possess inherent powers akin to a Civil Court to issue orders for the sake of justice. The Court found no provision in the grounds of appeal or the Statute authorizing the imposition of a Rs. 5 crores deposit for adjudication, deeming it beyond the Tribunal's jurisdiction. Consequently, the condition was deemed invalid and deleted.In conclusion, the High Court allowed the appeal, accepting the Tribunal's order with the exception of the deposit condition, which was struck down. The Commissioner was directed to proceed with the adjudication without requiring any deposit. The Court emphasized that the question of deposit did not arise until there was an adjudication establishing the appellant's liability. No costs were awarded in the matter.